Dollar pared back some gains overnight as expectation of Fed hike receded on weaker than expected ISM manufacturing. Focus will turn to employment data from US today. Non-farm payroll is expected to show 188k growth in August, slowed from prior month's 255k. Unemployment rate is expected to drop to 4.8%. Average hourly earnings are expected to grow 0.2% mom. Other employment related data released so far are mixed. ADP report showed 177k growth, slowed from 194k but beat expectation of 173k. Four week average of initial jobless claims rose 3k to 263k. Meanwhile, the employment component of ISM manufacturing dropped again to 48.3, down from 49.4, and stayed below 50 level for the second straight month. On the other hand, conference board consumer confidence improved from 96.7 to 101.1. The set of data is in line with expectation of some slowdown in hiring.
Cleveland Fed president Loretta Mester said yesterday "policy has to be forward-looking" and "pre-emptiveness is important". She noted that "if you have a forecast and inflation is moving up to your target and you're at full employment, then it seems like a gradual increase from a very low interest rate is pretty compelling to me". She also noted that to keep jobless rate stable, 75k to 150k new jobs per month is needed. And hiring has been stronger than that this year. She said that "the economy is basically at full employment". As of yesterday, fed fund futures are pricing in 24% of September hike and 57.7% chance of December hike.
Elsewhere, Japan monetary base rose 24.2% yoy in August. Japan will release consumer confidence. UK will release construction PMI. Eurozone will release PPI. Canada will release trade balance and labor productivity. US will release non-farm payroll, trade balance and factory orders.